- The Mexican weight is under pressure while China responds with tariffs of 50%, raising total rights to 84% on US products.
- The 10 -year American bonus yield is triggered at 4,513%; Operators speculate that the Fed could act in the face of the dislocation of the bond market.
- The inflation of Mexico in March is aligned with the objective of Banxico, keeping open the possibility of a 50 -PB feat cut in May.
The Mexican peso (MXN) extended its losses against the US dollar (USD) as the tensions between the US and China intensified after the US imposed more tariffs on Chinese imports, while the latter responded reciprocally. Volatility remains high and generally undermines appetite for risk, sending weight down. The USD/MXN is quoted at 20.96 after reaching a maximum of 9 weeks from 21.07, registering 0.64%profits.
The narrative of the financial markets continues to revolve around the “commercial war”. As tariffs of 104% were implemented at midnight on China’s products, the latter’s response was of the same magnitude, adding 50% tariffs to exports of US products to China, for a total of 84%.
The headlines pressed the US Treasury bonds, with the 10 -year bonus performance of the United States, shooting at a daily maximum of 4,513%. The fears of a dislocation in the US financial markets have led investors to speculate on a “PUT of the Fed” if the 10 -year bonus yield of the US exceeds 4.50%, which could trigger an intervention by the US Central Bank.
Apart from this, returning to economic data, the general inflation of Mexico in March rose in line with expectations, although it remained within the objective of 3% about 1% of the Bank of Mexico (Banxico). The underlying inflation also aligned with the estimates, revealed the National Institute of Statistics, Geography and Informatics (INEGI).
Despite the slight price increase, market participants are attentive to a rate cut by Banxico at the May meeting.
The US economic agenda presents some speakers of the Fed, with the president of the Fed of San Francisco, Mary Daly, and the president of the Fed of Minneapolis, Neel Kashkari. The operators also expect the latest minutes of the FED meeting and the US inflation data, which will be announced on Thursday.
Daily summary of market movements: the Mexican weight collapses while the CPI justifies greater relief of Banxico
- Inegi revealed that the Mexico Consumer Price Index (CPI) rose 3.80% year -on -year in March, which was aligned with estimates but was an increase with respect to 3.77% of the previous month. Excluding volatile elements, the so -called underlying IPC rose 3.64%, as projected.
- The Citi Mexico expectations survey revealed that Banxico is likely to cut the rates at 8% towards the end of the year. As for the USD/MXN pair exchange rate, it is expected to reach 20.90, and inflation will be maintained within the range of 2% to 4% of Banxico by 3.7%.
- The Gross Domestic Product (GDP) of Mexico is expected to grow 0.3% in 2025, less than the previous 0.6% survey
- The governor of Banxico, Victoria RodrÃguez Ceja, declared that the Central Bank will remain attentive to US commercial policies and its impact on the country, with a main approach to inflation.
Technical perspective of the USD/MXN: The Mexican weight remains stable while the USD/MXN approaches 21.00
The USD/MXN is expected to remain within the maximum of the year, since volatility exerts downward pressure on the currency of emerging markets (EM). The price action suggests that the upward trend remains intact, and if buyers push cash prices beyond the current daily peak of 21.07, a challenge to the maximum of the year to date (YTD) of 21.28 is on the horizon. With a greater impulse, 21.50 is the following objective, with the possibility of seeing the USD/mxn torque about 22.00.
Down, if the USD/MXN falls below 20.50, the following support would be the confluence of simple mobile socks (SMA) of 50 and 100 days about 20.34/36. If it is exceeded, the next support level is the psychological figure of 20.00.
Mexican weight FAQS
The Mexican weight (MXN) is the most commercialized currency among its Latin American peers. Its value is widely determined by the performance of the Mexican economy, the country’s central bank policy, the amount of foreign investment in the country and even remittance levels sent by Mexicans living abroad, particularly in the United States. Geopolitical trends can also affect MXN: for example, the Nearshoring process (or the decision of some companies to relocate the manufacturing capacity and supply chains closer to their countries of origin) is also considered a catalyst for the Mexican currency, since the country is considered a key manufacturing center in the American continent. Another catalyst for MXN is oil prices, since Mexico is a key exporter of the raw material.
The main objective of the Central Bank of Mexico, also known as Banxico, is to maintain inflation at low and stable levels (in or close to its 3%target, the midpoint of a tolerance band between 2%and 4%). To do this, the bank establishes an adequate level of interest rates. When inflation is too high, Banxico will try to control it by raising interest rates, which makes the indebtedness of homes and companies more cooling, thus cooling the demand and the economy in general. The highest interest rates are generally positive for Mexican weight (MXN), since they lead to higher yields, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken the MXN.
The publication of macroeconomic data is key to evaluating the state of the economy and can have an impact on the valuation of the Mexican weight (MXN). A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only attracts more foreign investment, but it can encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this fortress is accompanied by high inflation. However, if the economic data is weak, the MXN is likely to depreciate.
As an emerging market currency, the Mexican weight (MXN) tends to rise for periods of risk, or when investors perceive that the general market risks are low and, therefore, are eager to participate in investments that carry a higher risk. On the contrary, the MXN tends to weaken at times of market turbulence or economic uncertainty, since investors tend to sell higher risk assets and flee to the most stable safe shelters.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
